What can industries learn from the Great Toilet Roll Crisis of 2020?

Organisations play to their strengths and, like people, when they use these to excess they become weaknesses.

The latest toilet roll crisis began in March 2019 (yes, almost 12 months before you started panic buying the stuff). A potential shortage in the UK was first flagged up as a consequence of a no-deal Brexit. A headline in The Express read:

March 2019 Express.co.uk

The industry expert featured in the article was Andrew Large, Director General of the trade association, the Confederation of Paper Industries. He is reported as saying supplies were enough to last several weeks – if people kept calm – adding “when people start panic buying, they could empty the shelves within hours. No system could keep up with that.“

He wasn’t a lone voice. Former cabinet minister (2002-2005) Denis MacShane warned in January 2019 that the UK is Europe’s largest importer of loo paper but only stocks one day of supply. His comments months earlier suggested that people could be resorting to using newspaper and he said the supply situation was “not quite on time” (as opposed to Just In Time).

However, 2019 is not the start of the (t)issue. The modern day toilet roll crisis began as early as November 1973. Following the pattern of narratives that go viral, as outlined by Robert Shiller in his recent, well-timed book “Narrative Economics”, the 1973 crisis started with an unsubstantiated rumour of tissue shortages in Japan – few people took any notice. Then Harold V. Froelich, a congressman in the USA, issued press releases concerning a shortage of paper. By December 1973 he is reported to have written: “The U.S. may face a serious shortage of toilet paper within a few months…we hope we don’t have to ration toilet tissue…a toilet paper shortage is no laughing matter. It is a problem that will potentially touch every American.”

The press picked this up and the story developed. All that was needed now, according to Shiller’s thesis on viral narratives, was a celebrity to raise the story’s profile another notch. Up stepped Johnny Carson who quipped, live on TV, “You know, we’ve got all sorts of shortages these days, but have you heard the latest? I’m not kidding. I saw it in the papers. There’s a shortage of toilet paper!”

Panic buying ensued on a massive scale and for four months toilet roll became a rare commodity. There was never any shortage of toilet roll in the supply chain, it was all a rumour. The scarcity was a result of panic buying and hoarding. As Shiller explains, the truth is rarely enough to quash a false viral narrative.

Before we get to 2020, it’s important to acknowledge the special place toilet roll seems to have in our lives. The 1973 panic was repeated in Venezuela in 2013 when rumours of price controls led to fears of a shortage in the supply of toilet paper. Panic buying by consumers is what then caused a shortage despite attempts to reassure the public there was plenty in the supply chain.

So on to 2020 where we saw the same pattern emerging. People’s sensitivity to the potential unavailability of toilet paper became heightened in early February when the spread of Coronavirus in Asia led to scenes of panic buying (and armed robbery) of loo roll in Hong Kong. As in 1973 and 2013, this was fuelled by rumour of shortages despite assurances that there was no actual shortage of tissue.

Social media provided the rapid dissemination around the world of scenes of panic buying, empty shelves, conflict and jokes about toilet rolls. As in the no-deal Brexit scare of 2019, Google searches relating to toilet paper spiked.

Google Trends: Interest in Toilet Paper

As COVID-19 spread beyond Asia, so did the fear of shortages of hand sanitizer, facemasks and then toilet roll. The prospect of quarantines and lockdowns led to the spread of panic buying beyond these items to include paracetamol, soap, pasta, rice, tinned food, toothpaste, meat, flour and an ever widening range of food and drink and even an increase in demand for mini-freezers.

Armed with a trolley and a car, consumers’ shopping at major supermarkets was taken to a whole new level. Shops looked like they’d been gutted. Consumers were being swept along by the need to stockpile. As one shopper said to me “I went to buy flour. I couldn’t find any so I came away with 24 rolls of toilet roll. I don’t need toilet roll. I would have preferred Ben & Jerry’s ice-cream but everyone’s talking about toilet roll so I thought I’d buy it.“

Supermarkets felt the brunt of this increase in demand as they were left with empty shelves. An empty shelf causes consumers to fear shortage – despite being told there is plenty of food to go around – and therefore they buy more than they immediately need. This leads to shelves emptying faster and panic buying spreading to other items.

Supermarkets pride themselves in being able to manage supply. They source product and bring it to the shelves. They cope with seasonal peaks in demand, e.g. around Christmas, and everything they do is about keeping the products that consumers want on the shelves. That is their strength. But that strength, when used to excess, is also their weakness; their blind spot.

Faced with increased demand for toilet roll and hand sanitizer, they worked hard to restock and they kept on with this approach as the range of products affected by panic buying increased.

“Whilst customers are stocking up, our colleagues are working around the clock to fill our stores with what you need“

Wm Morrisons 23/3/2020

“We are continuing to work around the clock to feed the nation in these difficult times”

Sainsbury’s 22/3/2020

They attempted to reassure the public there was plenty of food available in the supply chain, plenty for everyone if people remained calm, and they enlisted the Government to make similar statements. Meanwhile they recruited more staff in a desperate attempt to be able to fill shelves faster. This led to knock on, probably unnecessary, consequences in the supply chain. For example, when demand for eggs leapt a shortage of live birds was reported.

As the CEO of Asda, Roger Burnley, wrote to me, “Your assertion of ill preparedness is of course by definition to an extent true – for supermarkets, for the UK, for the world“. He goes on to say that “there is over £1bn of incremental food and essentials in homes now” albeit “undoubtedly unevenly spread“. His pride in the industry’s supply chain is understandable but the panic buying, driven by rumour and empty shelves, was unnecessary.

Now, with the UK in “lockdown” – an entirely predicable outcome – shoppers are rarely visiting the supermarkets and Burnley confirmed “demand is dropping as we move towards social distancing and limiting numbers“. The shelves are full of most items. Nobody wants to buy toilet roll now. Fresh produce is left to rot and flowers are being given away because insufficient numbers of people are there to impulse buy.

“We find ourselves in an unprecedented situation“

Tesco 24/3/2020

Despite what Tesco asserts, as we’ve seen, panic buying is not new. The same product, toilet roll, was panic bought in 1973 and 2013. Rumours of shortages arose in 2019 and videos of panic buying in Asia were widespread long before loo paper became “a thing” in the UK.

So what went wrong?

Supermarkets relied on their strengths and used these strengths to excess at a time when it was a clear a different approach, a different mindset, was needed.

Rather than think they could keep the shelves full through the efficiency of their supply chain and their reassuring statements, they needed to recognise they were entering a panic buying scenario and switch to a different model of operation. This is very difficult for supply chain planners to entertain but this is what was needed and what was belatedly implemented after pressure from consumer groups.

Supermarkets did not have in their crisis management planning a strategy of switching to a rationing model in times of panic buying. Why would they? Who would introduce rationing first? In the cut-throat world of supermarkets, no firm is likely to initiate rationing ahead of any other firm and risk losing market share. However, once the situation became critical and Government became involved supermarket CEOs started collaborating with each other to find way a united way forward.

The toilet roll crisis of 2020 could have been avoided if supermarkets had recognised people’s well documented special relationship with loo rolls, the inevitable wave of panic buying that would arise and it’s likely spread to other items. Supermarkets could have been alert to the risk of using their strengths to excess and could have collaborated much earlier to implement an industry-wide rationing approach. Rather than hire 1000s of extra staff to fill shelves, they could have hired extra security, restricted access to stores, restricted the use of trolleys and rationed vulnerable products.

The smaller stores, such as Lidl and Aldi, tended to have much better product availability at the time the bigger supermarkets were being emptied.

“Huge difference between how different supermarkets are coping though. Tesco, Morrisons seem completely unprepared. Aldi on top of the game and Sainsbury’s communicating/prioritising better than others for delivery. DOB [date of birth] in first instance and then adding other vulnerable groups.“

“Aldi….shelves less depleted and lots of staff trying help/organise.”

Shopper via Twitter 21/3/2020

These smaller stores had the advantage of only having baskets available and were quick to restrict access through their door security, to one-in-one-out.

The larger supermarkets seemed to hesitate.

“Unfortunately, we have not officially announced any measures of this nature”

Wm Morrisons 23/3/2020

“We have considered extra security at the door but we feel we would need assistance from the Government or the Police to enforce this”

Waitrose 21/3/2020

The rationing model is what all supermarkets have now implemented thanks to the Government’s “lockdown” and they’ve done this without the Police. The tannoy in my, now largely empty, Sainsbury’s announces that we are allowed no more than three of the same item and two for selected items. The elderly and NHS workers are given privileged access to shop before the now absent hoards of panic buyers.

Once the “lockdown” had been introduced in the UK (20:30 23 March 2020), the supermarkets changed their approach. Waitrose introduced “marshals”, M&S “greeters” and additional staff at Asda all worked at store entrances to restrict access and encourage social distancing in queues. This is consistent with the rationing model and could have been introduced much sooner if the supermarkets had changed from their strengths-based “supply approach” to a “rationing approach” and collaborated earlier.

So what can other industries learn from this?

In times of crisis, organisations will play to their strengths even to the point that these become weaknesses. The desire to “compete” blinds organisations to the need to collaborate in times of extra-ordinary crisis and to the need to adopt different models of operation.

A coronavirus pandemic was predicted in 2007 following the SARS outbreak and “infectious disease” was included as a specific “high impact-low likelihood risk” in The Global Risks Report 2020. The great toilet roll crisis of 2020 was predictable and could have been avoided. It should have formed part of retailers’ contingency planning.

Questions to ask in your organisation

What strengths does our organisation rely on?

How can these, when used to excess, become a weakness?

In what extra-ordinary circumstances would our organisation overly rely on its strengths?

What alternative approach or mindset would deliver a better result in these circumstances?

If you would like help exploring your organisation’s answers to these questions, please contact Brilliance Unlocked Ltd.